Prospects of Cold Ironing As an Emissions Reduction Option
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Downloaded from orbit.dtu.dk on: Oct 07, 2021 Prospects of cold ironing as an emissions reduction option Zis, Thalis Published in: Transportation Research. Part A: Policy & Practice Link to article, DOI: 10.1016/j.tra.2018.11.003 Publication date: 2019 Document Version Peer reviewed version Link back to DTU Orbit Citation (APA): Zis, T. (2019). Prospects of cold ironing as an emissions reduction option. Transportation Research. Part A: Policy & Practice, 119, 82-95. https://doi.org/10.1016/j.tra.2018.11.003 General rights Copyright and moral rights for the publications made accessible in the public portal are retained by the authors and/or other copyright owners and it is a condition of accessing publications that users recognise and abide by the legal requirements associated with these rights. Users may download and print one copy of any publication from the public portal for the purpose of private study or research. You may not further distribute the material or use it for any profit-making activity or commercial gain You may freely distribute the URL identifying the publication in the public portal If you believe that this document breaches copyright please contact us providing details, and we will remove access to the work immediately and investigate your claim. Prospects of cold ironing as an emissions reduction option This is a pre-print of an article published in Transportation Research Part A: Policy and Practice The definitive publisher-authenticated version is available here: https://www.sciencedirect.com/science/article/pii/S0965856418303264 Zis, T. P. (2019). Prospects of cold ironing as an emissions reduction option. Transportation Research Part A: Policy and Practice, 119, 82-95. Prospects of cold ironing as an emissions reduction option Thalis Zis* Department of Management Engineering, Technical University of Denmark, Produktionstorvet, 2800 Kgs. Lyngby, Denmark, [email protected] Abstract Cold ironing is the process of providing shorepower to cover the energy demands of ships calling at ports. This technological solution can eliminate the emissions of auxiliary engines at berth, resulting in a global reduction of emissions if the grid powering the ships is an environmentally friendly energy source. This paper conducts a literature review of recent academic work in the field and presents the status of this technology worldwide and the current barriers for its further implementation. The use of cold ironing is mandatory in Californian ports for ship operators and as a result terminal and ship operators were required to invest in this technology. In Europe, all ports will be required to have cold ironing provision by the end of 2025. Other regulations that target local emissions such as Emission Control Areas can have a significant impact on whether cold ironing is used in the future as a potential compliance solution. This paper constructs a quantitative framework for the examination of the technology considering all stakeholders. The role of regulation is shown to be critical for the further adoption of this technology. Illustrative case studies are presented that consider the perspective of ship operators of various ship types, and terminal operators that opt to invest in shorepower facilities. The results of the case studies show that for medium and high fuel price scenarios there is economic motivation for ship operators to use cold ironing. For the port, the cost per abated ton of pollutants is much lower than current estimates of the external costs of pollutants. Therefore, shorepower may be a viable emissions reduction option for the maritime sector, provided that regulatory bodies assist the further adoption of the technology from ship operators and ports. The methodology can be useful to port and ship operators in examining the benefits of using cold ironing as an emissions reduction action. 1. Introduction Maritime shipping is considered the most fuel-efficient mode of transport in ton-miles terms, and moves about 90 % of the global trade (UNCTAD, 2017). The third GHG study (IMO, 2014) estimates that shipping accounts for approximately 2.2% of the global anthropogenic CO2 emissions, representing a 0.5% decrease from the second GHG study estimates (IMO, 2009). However, the sector has seen increasing pressure, through new regulations, to improve its environmental performance, particularly in light of its contribution to harmful pollutant emissions on human health. Maritime transport accounts for 5% to 8% of the global SOx emissions (Eyring et al., 2005), and approximately 15% for NOx (Corbett et al., 2007), while PM emissions from shipping near coastlines and ports have been linked to fatalities attributed to respiratory health issues. The IMO is regulating the maximum sulphur limits in fuel through the revised MARPOL Annex VI, which also designated sulphur emission control areas (SECA) where tighter limits apply. Current SECAs include the Baltic Sea, the North Sea, the North American emission control area (ECA) that extends 200NM from the US and Canadian coasts, and the US Caribbean ECA. The latter two ECAs have also set restrictions on PM and NOx emissions. The first results of the SECAs on emissions reduction show significant improvements. In relevant literature, there has been no recent update on the share of maritime transport in SOx emissions, and the latest reliable estimate is in the aforementioned study of Eyring et al., back in 2005. On a more recent publication, Zis and Psaraftis (2018) used data from the Organization for Co-operation and Development (OECD) on its member countries and estimated that SOx emissions from all transportation modes accounted for 3.5% in 2015. Considering that road transport accounted for 0.48%, the share of maritime transport in SOx emissions has been drastically reduced since 2005. In addition to the introduction of SECAs, as of January 2010 the European Union (EU) set a sulphur limit of 0.1% for ships at-berth in EU ports with stays longer than 2 hours, as well as when sailing on inland waterways (European Commission, 2005). The European Commission has promoted the further provision of shorepower to its member states via an official recommendation (European Commission, 2006). Port authorities around the world have launched initiatives that promote use of low-sulphur fuel in their proximity, with the port of Singapore being a notable example under the Green Ship and Green Port programmes offering monetary incentives for clean practices that reduce CO2 and SOx emissions. Finally, the ports of Los Angeles and of Long Beach have introduced voluntary speed reduction programmes (VSRP) in their proximity in return for a reduction of port fees, and are moving towards making the use of shorepower for ocean going ships compulsory. With regards to regulations targeting sulphur emissions, ship owners can comply by either switching to ultra-low sulphur fuels such as Marine Gas Oil (MGO) or investing in scrubber systems that treat the exhaust gases to remove SOx and PM emissions thus allowing the use of Heavy Fuel Oil (HFO). Similarly, to cope with regulations on emissions at ports a ship can either use cleaner fuel or be retrofitted to receive shorepower if the port has cold ironing facilities. Therefore, to address environmental regulation the shipowners have to pay to acquire abatement technology, or increase their operating costs by using cleaner but pricier fuel. Which option is more cost-effective for the shipowner depends on various factors, including ship type, ship size, regulations affecting the waters in which the ship sails, and ports of call. At the same time, the decision of a port to invest in technologies that allow the provision of shorepower depends on several factors spanning from emissions reduction policies, and the penetration rate of the technology in the calling ships. This paper discusses the feasibility of cold ironing (CI) investments from the perspective of shipowners, terminal operators, and regulatory bodies when considering the scope of environmental improvement that this technological solution can provide. The first section of this paper presents a concise literature review of relevant research in port emissions and use of CI. The subsequent section presents the methodology used for the assessment of an investment in such systems from all stakeholders, and expands on previous models to estimate the new environmental balance following the installation of a CI berth at a port. The third section considers the perspective of ship operators that retrofit ships of different types and the net present value (NPV) of their investments. A similar analysis is conducted from the perspective of a terminal operator that can choose to invest in a shorepower facility, and then decide the pricing strategy for the provision of electricity to the ships. The paper concludes with a discussion on the importance of the regulations on such technologies, the attained cost of reducing a ton of pollutant compared to other technologies, and the potential implications of internalizing external costs attributed to ship activity at ports. 2. Literature review The majority of academic research on the environmental impacts of shipping has focused on the overall contribution of the sector, and on ways to mitigate emissions predominantly via slow steaming. However, effects near ports have not been extensively researched, with the majority of studies being technical reports of port authorities focusing on a very broad level of environmental concerns. 2.1 Environmental impacts of shipping near ports Davarzani et al. (2016) conduct a literature review on greening ports and identify research areas for further investigation. They note that the focus on emissions from ships and port equipment is relatively new with a significant increase in publication numbers during the last decade. Slow steaming has been examined and shown to be a cost effective measure that simultaneously reduces carbon emissions (Golias et al., 2010). The reduction of sailing speed in the full journey also results in a small reduction of emissions in the proximity of the port (Zis et al., 2015).